Question

According to Total Expenditure method, rise in price of a commodity leads to ______ in total expenditure in case of less elastic demand.

Options

• Increase

• No Change

• Decrease

• Either (a) or (c)

Answer 1

According to Total Expenditure method, rise in price of a commodity leads to increase in total expenditure in case of less elastic demand.

Explanation:

For less elastic demand, price and total expenditure move in the same direction. Therefore, a rise in price increases total expenditure.